Fayetteville plans strategy for use of US bailout money

FAYETTEVILLE — The city is ready to hand out the bulk of its U.S. bailout money now that the federal government has released final rules.

The city received $17.9 million in federal aid and received half the amount. The rest will come this year.

So far, the city council has authorized the use of nearly $2.3 million. The city is using $1.9 million to compensate employees with a bonus for their service during the covid-19 pandemic.

Another $94,000 was spent on a regional campaign encouraging people to get vaccinated, led by the Northwest Arkansas Council.

The city has also made $400,000 available for an incentive program giving residents or people who work in the city $100 to get fully vaccinated.

That leaves about $15.6 million remaining of the total. City officials have spent the past several months gathering submissions from various department heads and advisory committees, based on the interim rules the federal government provided in May. The final rules were released earlier this month.

Cities can spend US bailout money on four types of needs: responding to the pandemic or its negative economic impact; replace lost income; offering premium pay to essential workers; and improving water, sewer and broadband infrastructure.

Mayor Lioneld Jordan said he wanted to use the money to tackle environmental, economic and social issues. Administrators ended up receiving about $118 million in requests, said Paul Becker, the city’s chief financial officer.

The city, like all the others, must commit all of its US bailout money by 2024 and spend it by 2026. Otherwise, the money will have to be returned.

“It’s on our front and center now,” Chief of Staff Susan Norton told City Council during an agenda-setting session on Tuesday.

The city must follow the final rules closely when deciding how to use the money, Becker said. There are reporting requirements. Any violations could force the city to refund money or the federal government accuse the city of embezzlement, he said.

“Right now, we have to go through again and make sure that all the projects that we thought would be considered are eligible under the final rules,” Becker said.

The final rules are 437 pages.

The city hopes to launch an online portal for nonprofits and other organizations that support individuals or groups affected by the pandemic, Norton said. The city could contract out efforts with those organizations, but would still have to track the money and be held accountable for how the money is used, she said.

Norton said the city plans to use the portal to communicate eligibility and reporting requirements to nonprofits and collect potential proposals for city staff to review.

Apps with the described rules would be available to organizations, Norton said. Examples of uses the city has in mind include a childcare voucher program for working parents and support for minority and LGBTQ populations particularly impacted by covid due to their health and economic status, she said.

Devin Howland, the city’s director of economic vitality, said administrators are also considering helping businesses affected by covid, particularly those in the hotel and lodging industry. Many residents are unemployed or underemployed due to the pandemic, so the city also wants to boost workforce development, he said.

The administration plans to narrow down proposals to those most likely to receive funding. Then the board can vote on a final package, Norton said. The goal is to have everything ready in the spring, she said.

Council member Sonia Gutiérrez Harvey asked the administration to explore support for the creative economy, which has been one of the hardest-hit private sectors, she said. The city has an arts council made up of working artists who can work with city staff on proposals.

Council member Teresa Turk asked the administration to open the portal to nonprofit organizations that could help with water quality, in addition to social issues.

Jordan told the board he was open to ideas.

“We need to know what you all think, and we’ll see if it’s within the rules or not,” he said. “We’re just opening the conversation and talking points right now to get us on the path to where we need to go.”

The breakdown

Towns in northwest Arkansas will receive the following amounts of U.S. bailout money:

• Springdale: $21.4 million

• Fort Smith: $21.2 million

• Fayetteville: $17.9 million

• Rogers: $11.7 million

• Bentonville: $6.9 million

• Total: $79.1 million

The Municipal League of Arkansas posts regular updates on its website on federal rules cities must follow when using money: https://www.arml.org/resources/american- rescue-plan/

Source: Springdale, Fort Smith, Fayetteville, Rogers and Bentonville